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6 , 2 0 18 RISK INSIGHTS®

Why Antimicrobial Resistance and Contents

Agricultural Biosecurity Must Be Assessing the threat from AMR 2

AMR explained 2
Thought of As Enterprise Risk
New thinking needed on risk 4
by Melissa S. Hersh, Principal, Hersh Consulting, LLC,
Washington D.C., USA

Unmitigated antimicrobial resistance will increase global mortality and morbidity

from currently treatable illnesses and diseases. Concomitant with direct human
losses from treatment deficits, human consumption of antimicrobial-resistant
animals and plants will indirectly amplify human losses, as well as negatively
impact animal welfare and the environment. Although the threat from antimicrobial
resistance (AMR) is real and warrants global attention, the strategy and narrative
of how to mitigate these risks is predominantly limited to the development and
humanitarian sectors. As a result, an echo chamber has emerged.

The public health, veterinary, and associated policy communities are focusing on
promoting antimicrobial use (AMU) stewardship, the need for more- and better-funded
research and development (including medicines, diagnostic tools, and vaccines), and
access to affordable treatment. Despite increasing attention to the emergent AMR risk,
the response to the existing strategy and narrative has not been successful.

What is missing is not only treating the business risk associated with AMR as
enterprise risk but looking at AMR holistically as enterprise risk, in which the
insurance industry should play a role. The effort to counter AMR is not just about
saving lives, but also about preventing losses, including economic ones.

The management and mitigation of cyber and information risk provides one of
the best comparisons for how to manage and mitigate AMR risk. The two risks are
similarly complex, diffuse, interdependent, and constantly evolving. This article will About This Newsletter
look at the experience of using enterprise risk management to address cyber and Risk Insights is a technical publication
information risk and to draw relevant lessons, guidance, and recommendations for produced by Gen Re for life and health
insurance executives worldwide. Articles
addressing the AMR threat. The goal is to apply and discuss these lessons in the
focus on actuarial, underwriting, claims,
context of AMR.
medical and risk management issues.
In short, the dominant AMR strategy and narrative is too limited, and the dominant Products receiving emphasis include life,
response is failing. Hence, we need a broader strategy and narrative and better health, disability income, long term care
and critical illness insurance.
response. It is time to look at AMR as enterprise risk.

A Berkshire Hathaway Company

Assessing the threat from AMR
AMR explained Antimicrobial resistance (see Box 1) is an emerging
risk, threatening both agricultural biosecurity and
human health.3 This risk is a direct consequence
Antimicrobial resistance (AMR) refers to the
of antimicrobial use, or often misuse (AMU).4
resistance that microorganisms – such as
AMR and AMU are widely acknowledged to be in
bacteria, fungi, viruses and parasites – develop
large part a result of human behaviours. However,
to withstand the effect of medicines, leading
AMR is also a natural biological occurrence.5 AMR
to antibiotic-resistant infections. Human-borne
microorganisms occur in humans, animals, and
antibiotic resistance can affect anyone, of any age,
crops. At times, there is a convergence between
in any country. It occurs naturally, but misuse
agricultural AMR and human food consumption,
of antibiotics in humans, animals and crops
thereby creating a separate subset of risks known
(foodborne AMR) is accelerating the process.
as foodborne AMR that comes with its own set of
A growing number of infections – such as animal and public health impacts and agricultural
pneumonia, tuberculosis, gonorrhea, and biosecurity vulnerabilities.6 According to the World
salmonellosis – are becoming harder to treat as the Health Organization (WHO), AMR is one of the
antibiotics used to treat them become less effective. biggest threats to global health, food security, and
Antibiotic resistance leads to longer hospital stays, development today.7 (See Figure 1)
higher medical costs and increased mortality.
High-consequence animal infectious diseases of any
Moreover, this resistance increases the likelihood
origin in wildlife, livestock, and poultry can cause
that patients will forego necessary procedures
supply chain disruptions. Significant production
and operations because of decreased efficacy
losses can have direct and indirect (secondary and
of antimicrobials, which may over time increase
tertiary order) economic and political impacts that
indirect costs.
are wide-ranging and potentially long-lasting.8 For
On the agricultural front, discussions about example, grain and feed producers, logistics and
implementing agricultural biosecurity best port operators are susceptible to upstream losses
practice – or the practice of ensuring sustainable if livestock or poultry requires culling due to a
capacity to prevent, rapidly detect, respond and
mitigate against animal infectious diseases that
can adversely impact draft animals, animals for
consumption, animals for export, and public
health (diseases that transmit to humans, known
as zoonoses) – do not always have an impact on
behaviours, even though they are changeable.
Many of the losses associated with these risks are devastating animal infectious disease; the billions
preventable.1 of dollars lost from ineffective biosecurity has been
demonstrated time and time again.9 Additionally,
The World Bank projects that by 2050 AMR will
trade restrictions directly linked to the production
cause global GDP to fall by between 1.1% and
of animals with excessive antimicrobials are likely to
3.8% as the volume of real exports also shrinks.
continue to be an issue – one that might actually
The decline in global livestock production could
incentivize positive AMU trends.10
range from a low of 2.6% to a high of 7.5% per
year. Increases in global healthcare costs may range Preventing or mitigating the risk of AMR is a
from USD 300 billion to more than USD 1 trillion persistent challenge for the medical and veterinary
per year, with an additional 28.3 million people professions, the farming and food production
falling into extreme poverty.2 industry, and the pharmaceutical industry. In
characterizing the AMR threat, there is near
universal consensus. According to the findings of
one study, “This phenomenon, coupled with a
dry antibiotic pipeline, has led the World Health

2 Gen Re | Risk Insights, No. 6/2018

Organization to warn of a ‘post-antibiotic era mortality rate increases include loss of productivity
where common infections and minor injuries can and income, while national healthcare budgets
kill’”.11 Clearly, AMR is a challenge across socio- (where they apply) will be directly impacted.
economic and national development lines. Despite According to the OECD, given current resistance
the scope and magnitude of this complex global rates, “[T]he total GDP effect in OECD, accounting
challenge, it is anticipated that the burden – direct for increased healthcare expenditure, would
and indirect – of AMR will have the most significant amount to USD 2.9 trillion by 2050.”16 Today,
impact on low and middle-income countries drug-resistant infections are said to account for
(LMIC).12 700,000 annual deaths, and are expected to reach
10 million by 2050 and cumulatively account for
Additionally, research findings support a correlation
USD 100 trillion in losses.17
between AMR in LMIC and out-of-pocket health
expenditures for countries that require public Economic data in support or opposition to the
sector medication copayments.13 The conclusion of continued use of antimicrobials in livestock for
one study found that this relationship was driven growth production is insufficient. Furthermore,
by countries that require those copayments. It there are insufficient data sets to quantify the
also suggested that “cost-sharing of antimicrobials impact of resistance in humans stemming from the
in the public sector may drive demand to the use and consumption of antimicrobials in livestock
private sector where supply-side incentives to specifically, and agricultural products generally.18
overprescribe are likely heightened and quality Going forward, more and better data are needed.19
assurance less standardised.”14
Surveillance is essential for assessing AMR spread,
In OECD countries, it is anticipated that AMR informing policy and making decisions about
will increase the frequency, intensity, and cost infection control and prevention responses.
of hospital admittances. It is predicted that, on The WHO highlighted the need for a common
average, hospitals will spend an additional USD approach in 2014. Since then, it has launched
10,000 to USD 40,000 per patient.15 Indirect costs a monitoring collaboration, called the Global
that will accrue from longer hospital stays or Antimicrobial Resistance Surveillance System

Figure 1 – Deaths attributable to AMR every year (by 2050)

North America 4,730,00



Latin America

number of deaths Mortality per 10,000 population

5 6 7 8 9 10 >

Source: Review on Antimicrobial Resistance. Antimicrobial Resistance: Tackling a Crisis for the Health and Wealth of Nations 2014

Gen Re | Risk Insights, No. 6/2018 3

(GLASS). A total of 50 countries were enrolled time-intensive. For AMR, two parallel surveillance
by the end of 2017 but many others face difficult systems are needed: one for monitoring and
challenges to build national collection systems. detecting changes in AMU and one for monitoring
and detecting changes in AMR. Additional, specific
GLASS combines data from laboratories, together
surveillance systems need to be established to
with epidemiological, clinical, and population-level
address the relationship to foodborne AMR and
data, in a standardized way. The WHO hopes the
impacts on human consumption.
strengthened database this will create will provide
a better understanding of how human health is Substantial business interruption costs are likely
affected by AMR, and allow for better analysis and if animal slaughter, food production, or a food
prediction of trends. Initially, GLASS will combine recall is required. Additionally, downstream effects
AMR data for bacteria – such as Escherichia coli, can include loss in market share, reputational
Salmonella, Staphylococcus aureus, Streptococcus losses, reduced movement of people, reduced
pneumoniae and others – that cause infections in investments, unemployment, banned exports,
humans. A first report was published by the WHO
in January 2018.20

The call to action has been sounded globally in

the food and agricultural sectors with a particular
focus on countries where, concomitant to
surveillance deficits, there are also regulatory and
legislative gaps. However, the onus is not wholly
food systems insecurity, and political instability.
on governments, and there is indeed recognition
Moreover, increasingly, there is a possible risk of
by – if not a plea to – producers, traders, and other
deliberate disinformation campaigns being used to
stakeholders in the value chain to collect more data.
foment and foster dissent and divisiveness, and to
According to the OECD, “There is also insufficient undermine economic stability. It is reasonable to
data to develop global maps of antimicrobial assume that the likelihood of subtle state and non-
resistance in livestock and humans, which would state influence operations used to highlight AMR as
otherwise enable accurate comparisons between well as to focus attention to agricultural diseases is
humans, livestock species, industries, countries a natural evolution of this threat vector and – like
or regions.”21 This has been echoed by the Food antimicrobial resistance – requires monitoring.23
and Agricultural Organization (FAO) of the United
Generally, antimicrobial drugs have helped combat
Nations, which stated that “only 42 countries in
infectious diseases that were lethal in the recent
the world have systems to collect data on the use
past. In agriculture, antimicrobial use can make
of antimicrobials in livestock.”22
sick animals healthy and even enhance productivity
While surveillance requires data, not all data is in crops, livestock, and aquaculture. In humans,
equal. The veracity, volume, variety, and velocity complex surgery, organ transplantation, and
of data that can be collected seem daunting and cancer treatment could all be at risk if antibiotics no
longer combat the effects of harmful pathogens.
As AMR develops, the ability to treat infections
diminishes, and the risk increases for the spread of
persistent infections.

New thinking needed on risk

Antimicrobial use (AMU) and antimicrobial
resistance (AMR) are a global challenge. AMR
is not only a public health risk it, is also a
business risk. Efforts to raise awareness and curb
behaviors to limit indiscriminate and injudicious
use of antibiotics are overlooking the role that
the insurance industry can play in positively

4 Gen Re | Risk Insights, No. 6/2018

modifying behaviors and incentivizing adherence Endnotes
to professional best practices. The insurance 1 Taylor, J. et al. Estimating the economic costs of
industry has a unique opportunity to get ahead antimicrobial resistance: model and results. RAND
of an emerging risk, and to positively contribute Report. 2016, p.6.
research_reports/RR911.html. See also Thanner, S, et
to shaping thought leadership, including framing
al. Antimicrobial resistance in agriculture. mBio. doi:
the potential suite of losses in the health, life, 10.1128/mBio.02227-1519 April 2016 mBio vol. 7 no.
property and casualty areas that will arise from 2e02227-15
AMU and AMR – even if AMR in part is a naturally 15.full. “There is limited knowledge concerning the
transmission of AMR within agricultural sites and to
occurring phenomenon. humans via foods of animal and plant origins, as well
as human health risks posed by the agricultural release
In looking at how to approach the risk narratives
of antimicrobial agents (AMA), antimicrobial resistance
for AMU and AMR, and develop associated controls genes (ARG), and antimicrobial-resistant bacteria
to reduce losses through a combination of risk (ARB) into the environment. However, food animals
transfer and mitigation measures, it’s possible for are not only vehicles of AMR transmission but also are
endpoints in the dissemination, selection, and spread
the insurance industry to turn to lessons being
of ARB and ARG.”
learned in how to manage cyber risk. Both cyber
2 Adeyi, Olusoji O. et al (2017). Drug-resistant
and AMR risk can be characterized as having infections: a threat to our economic future (Vol.
systemic exposures with cascading impacts. 2): final report (English). Washington, D.C.: World
Like unmitigated cyber risk, AMR risk can and Bank Group.
curated/en/323311493396993758/final-report. See
does result in physical, operational, financial and
reputational losses. While there is no panacea release/2016/09/18/by-2050-drug-resistant-infections-
for cyber or AMR risk, there is much that the could-cause-global-economic-damage-on-par-with-
insurance industry can do to help the international
3 The Food and Agriculture Organization (FAO)
community to bound and articulate the risk
defines biosecurity as “[A] strategic and integrated
exposure and loss landscape from these risks by approach that encompasses the policy and regulatory
contributing to the development of a common frameworks (including instruments and activities)
lexicon for each. that analyse and manage risks in the sectors of food
safety, animal life and health, and plant life and health,
including associated environmental risk. Biosecurity
covers the introduction of plant pests, animal pests
and diseases, and zoonoses, the introduction and
About the Author release of genetically modified organisms (GMOs) and
their products, and the introduction and management
Melissa S. Hersh is the principal of Hersh of invasive alien species and genotypes. Biosecurity is a
Consulting LLC, a global strategy and risk holistic concept of direct relevance to the sustainability
consulting firm that advises governments, IGOs of agriculture, food safety, and the protection of the
and Fortune 500 companies across a variety environment, including biodiversity.” http://www.fao.
of aerospace and defense, homeland security
and emergency management, energy, and 4 The FAO Action Plan on Antimicrobial Resistance 2016-
global health and agricultural issues. She is an 2020. Supporting the food and agriculture sectors in
implementing the Global Action Plan on Antimicrobial
Affiliate of the Nuclear Economic Consulting
Resistance to minimize the impact of antimicrobial
Group (NECG), Faculty Associate with Arizona
resistance. 2016.
State University’s College of Public Service &
5 WHO (2018) Antimicrobial Fact Sheet http://
Community Service, and a Research Associate
at ASU’s Center for Emergency Management
see also: U.S. FDA, Animation of antimicrobial
and Homeland Security. Previously, she was a resistance (video). November 2017. https://
VP of Supply Chain Risk Management at Marsh
Risk Consulting, a technical expert for the UN AntimicrobialResistance/ucm584286.htm.
and the WHO on health 6 The nexus between human, ecology, and animal
security and CBRNE health is referred to as “One Health”. For more
issues, and has worked information, see:
for various international one-health/en/.
think tanks. She can be 7 WHO (2014) Antimicrobial resistance: global
contacted at report on surveillance.
Tel. +1 312 804 3238 bitstream/10665/112642/1/9789241564748_eng.
or melissa@hersh- pdf?ua=1.

Gen Re | Risk Insights, No. 6/2018 5

8 Adeyi, Olusoji O. et al (2017). Drug-resistant infections: a threat to 16 Ibid.
our economic future (Vol. 2): final report (English). Washington, 17 Ibid at note 12.
D.C.: World Bank Group.
18 For more information on this issue, see the publications from
the FAO’s Ad Hoc Codex Intergovernmental Task Force on
9 Marsh (2007). The economic and social impact of emerging Antimicrobial Resistance (TFAMR):
infectious disease: mitigation through detection, research, codexalimentarius/committees/committee/en/?committee=TFAMR.
and response, fig. 2, p.12, In particular: FAO, OIE. Guidelines for risk analysis of foodborne
document/247102772/ecoandsocialimpactofemerginginfectio antimicrobial resistance, Codex Alimentarius publication. CAC/GL
usdisease-111208-pdf. See also: Narrod, C., et al. A one health 77- 2011. 2011.
framework for estimating the economic costs of zoonotic diseases sh-proxy/en/?lnk=1&url=https%253A%252F%252Fworkspace.fao.
on society. Ecohealth. 2012 Jun; 9(2): 150–162. Published online 7 org%252Fsites%252Fcodex%252FStandards%252FCAC%2BGL%
March 2012, doi:10.1007/s10393-012-0747-9. https://www.ncbi. 2B77-2011%252FCXG_077e.pdf.
19 OECD Trade and Agriculture Directorate Committee for Agriculture,
10 Maron, DF., et al. Restrictions on antimicrobial use in food animal Working Party on Agricultural Policies and Markets (2014).
production: an international regulatory and economic survey. Antimicrobial resistance: the use of antimicrobials in the livestock
Global Health. 2013; 9:48. sector, TAD/CA/APM/WP(2013)23/FINAL, 8 October 2014. https://
articles/PMC3853314/. See also: European Commission. AMR: a
major European and Global challenge. Fact Sheet. 2016. https:// e=TAD/CA/APM/WP(2013)23/FINAL&docLanguage=En.
20 WHO (2017) Global Antimicrobial Resistance Surveillance System
11 WHO (2014) Antimicrobial resistance: global report (GLASS) report early implementation 2016-2017, http://www.who.
on surveillance. 2014. int/drugsresistance/en/.
21 OECD Agriculture Policy Note, Use of Antimicrobials in Livestock
12 The Review on Antimicrobial Resistance Tacking Drug-Resistant Production, April 2106
Infections Globally: Final report and Recommendations, May 2016. antimicrobials-livestock-production.pdf.
22 The FAO action plan on antimicrobial resistance 2016-2020
supporting the food and agriculture sectors in implementing the
13 Alsan, M., et al. Out-of-pocket health expenditures and global action plan on antimicrobial resistance to minimize the
antimicrobial resistance in low- and middle-income countries. impact of antimicrobial resistance. 2016, p.1. http://www.fao.
Lancet Infect Dis. 2015 Oct; 15(10): 1203-10, published online Jul org/3/a-i5996e.pdf.
9 doi: 10.1016/S1473-3099(15)00149-8. See also: https://med.
23 There has also been attention drawn to the anti-vaccine movement
as well. For additional information, please see: Broniatowski,
David. “Combating Misinformation and Disinformation Online:
14 Alsan, M., et al. Out-of-pocket health expenditures and The “Battle of the Narrative.” National Academies of Sciences,
antimicrobial resistance in low- and middle-income countries. Engineering, and Medicine: Board on Behavioral, Cognitive, and
Lancet Infect Dis. 2015 Oct; 15(10): 1203-10, published online Sensory Sciences White Paper. 2017. http://sites.nationalacademies.
Jul 9 doi: 10.1016/S1473-3099(15)00149-8, https://healthpolicy. org/cs/groups/dbassesite/documents/webpage/dbasse_177315. pdf and Kavanagh, J. and Rich, M.D. “Truth Decay: An Initial
july_9_2015_0.pdf. Exploration of the Diminishing Role of Facts and Analysis in
15 OECD (2016) Antimicrobial Resistance: Policy Insights. http:// American Public Life.” Rand. February 2018. https://www.rand. org/pubs/research_reports/RR2314.html.

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